One of the most depressing decisions taken by our new government in 2010 was to cancel an £80 million loan to Sheffield Forgemasters, the modern engineering firm poised to take a lead in the global nuclear power market. As well as providing hi-tech jobs in post-industrial Britain, Forgemasters would have boosted our export prospects and helped to rebalance a British economy that has become too dependent on low-skill, service-sector employment.

It was a decision taken in the early days of the coalition, when the deficit hawks were most strident, and it is one that should be reversed by the supposedly progressive business secretary. Politically, it would help to dig Cable and his party out of their current hole, and economically it could be the starting point for an ambitious recovery programme. The financial crisis has shown the weakness of western nations that rely on credit and a service economy; bluntly, we need to make stuff that other people want, or need, to buy. The vital component for a nuclear power plant manufactured by Forgemasters should be an exemplar.

At the fag end of New Labour, Gordon Brown rather desperately proposed investing in electric car technology. Why not? Britain has a genius for motor manufacturing, though the industry was mismanaged out of existence 40 years ago. Today's children may be the last to drive petrol-powered cars; why not use the shift in technology to regain a lost industry? Similarly, we are moving into a new era of energy supply, and as a wet and windy island on the edge of Europe, we should be leading the way in renewables.

Who will pay for this recovery programme? We have a huge, state-owned financial sector, and in 2011 government must start directing its investments intelligently.

The attacks on 9/11 and 7/7, and the subsequent wars in Afghanistan, Iraq and military activities in Pakistan and other places dominated the first decade of this century. Hundreds of thousands of lives lost, many thousands more injured. Torture, extra-judicial killing, rendition and questionable covert operations have become more common.

Terrorism and our response to it can, therefore, have a profound impact on the cohesiveness of our society, our national security and indeed global peace and stability. Thus it is the most important issue for our politics and politicians.

A review of counter-terrorism strategies is a positive step. The government promise to let civil liberties and human rights prevail over anti-terror initiatives is refreshing. However, the anti-terror measures singled out the Muslim community. Gaining trust and support of this community must be a priority. This means government must engage with and listen to the diverse voices within the Muslim community, but must never seek to marginalise one group for another, or create favoured ones.

The rise of fascists, the EDL and BNP, anti-Muslim bias in the media and within certain section of our society frightens the Muslim community. Our politicians and government must promote greater dialogue between faith and ethnic communities to raise awareness.

To build confidence and make Muslim communities more resilient, the government must actively address the Muslim underachievement in education, employment and housing. Serious efforts must be made to understand and cater for the Muslim needs in schools, hospitals, job centres so that they are not left to struggle disproportionately more. This way the community will become more dynamic, economically productive and socially proactive and our society more cohesive. In the new year we must cherish the principle of freedom, respect and tolerance.

British women, we are told, earn – on average – less than their male counterparts. Women in their 20s, on the other hand, are now earning more than their male peers. This 2.5% disparity is eliminated by the age of 30, and the decision to have children. It is likely that this cohort's progression into middle age will do much to mitigate the earnings differential between the sexes, but the impact of at least nine months' continued absence from the workplace will inevitably have a deleterious effect on women's immediate earning potential and subsequent career prospects.

Nor is this effect is not restricted to women who choose motherhood. Employers' apparent reluctance to recruit women of child-bearing age, famously vocalised by Alan Sugar is providing a handicap to all women who happen to fit the demographic, regardless of their current or future plans for motherhood.

What is the answer? Well, the government could do worse than to consider shared parental leave. Despite recent amendments, Britain still has one of the most unequal parental leave arrangements in Europe. This not only ensures inflexibility for new parents, but continues to deter fathers from taking their full entitlement, as it is largely without pay.

The introduction of fully transferable parental leave would reduce the overall impact of women's absence from the workplace and, therefore, on pay and future career development. It would also go some way towards deterring recruiters' discrimination against young women, as the likelihood of men taking equal amounts of parental leave would increase significantly. Fathers would face a far more positive environment in which to request, and take, parental leave and would be able to play a far more active role in the raising of their children.

The system may have an impact on male-dominated professions in the short-term, but the corollary of this is that it would subsequently lead to an increase in female participation in these fields. The usual cries of excessive profligacy and bureaucracy from the CBI should be minimised as the overall effect of this change to employers would be broadly cost-neutral; the total net leave entitlement would remain the same between parents.

Fundamental political reform is one of the coalition's main ambitions for 2011. However these reforms will not change the fact that members of the Houses of Parliament are drawn from a narrow strand of society, which significantly fails to reflect the demographics of the wider electorate.

The Houses of Parliament are a socially exclusive boys club made of rich, privately educated men drawn mostly from law, media or business. As a result, we have education plans dictated by former Etonians and public school alumni with no experience of the state sector, health policy dreamed up by millionaires who can afford the best in private treatments, and welfare reform under the influence of men who have no concept of what it is like to be unemployed.

Reform of the House of Lords could provide the genuine social representation that our political system is lacking. An Athenian option would see the House of Lords populated by citizens with a selected cross-section of talents and life experiences. Policemen, teachers, NHS professionals and businessmen could take their place alongside people with experience of long-term unemployment, with mental health problems or with chronic disabilities. Representatives would be chosen through nomination to an independent panel – and would hold a single five-year salaried position.

Moving towards a fully elected second chamber would simply replicate the narrow demographics of the House of Commons. This alternative would allow the second chamber to fulfil its intended role – that of apolitical oversight of government policy in the interests of the electorate.

The most vulnerable groups in society; those on low incomes, those with mental illness and those with disabilities, also face the greatest hardship from the impending spending cuts. Therefore there can be no greater political priority than giving both a voice and real influence to the groups who are left marginalised by our current political system.